Samsung is investigating offline CBDC that works with Galaxy phones
A man walks past a display for the Samsung Galaxy Z Flip4 smartphone at the company’s Seocho building in Seoul on January 31, 2023.
Jung Yeon-je | Afp | Getty Images
Consumer tech giant Samsung is considering the launch of a central bank digital currency in cooperation with the Bank of Korea.
The South Korean electronics company announced on Monday that it had signed a memorandum of understanding with the country’s central bank to conduct technical research on the digital currency.
Samsung said such a CBDC, which refers to a digital currency issued by a central bank, would work “offline” and could be sent between owners of its Galaxy smartphones and smartwatches thanks to a secure chip in the devices.
According to Samsung, device-to-device payments could be made using near-field communication technology built into smartphones to enable contactless payments.
Samsung said it developed a solution that applies NFC technology to CBDCs last year. This allowed users to make a payment even when they didn’t have an internet connection, the company added.
In a Monday press release, Samsung said the company, together with the Bank of Korea, “will continue to explore how to minimize the security risks associated with offline payments to support reliable transactions in emergency situations even without network connections.”
“We are very pleased to be the first central bank to develop offline CBDC technology in cooperation with Samsung Electronics,” said Seungheon Lee, deputy governor of the Bank of Korea, in a press release.
“We hope that by establishing this MoU, the Republic of Korea will continue to lead the way in offline CBDC technology, a sector actively explored by global central banks,” he added.
Won-Joon Choi, executive vice president of mobile experience at Samsung, said, “This collaboration with Bank of Korea has enabled us to apply Samsung’s advanced security innovations to the digital currency space.”
“We expect that our collaboration will make a valuable contribution to the advancement of global offline CBDC technology,” he added.
Countries from China to the US are ramping up research and experimentation with so-called CBDCs in hopes that it might make it easier for consumers to send money instantly.
China has already created a digital version of the Chinese yuan and is testing its CBDC in numerous cities, while the US is also carefully evaluating whether to launch a digital version of the dollar and how it would work.
The practicality of issuing CBDCs has been questioned by some commentators given the ease of making transfers using currently available methods such as online banking and money transfer apps, as well as cryptocurrencies.
Various privately developed digital currencies also currently enable near-instant payments. But the vast majority of tokens like it Bitcoin are very volatile. Stablecoins have been touted as a possible solution to this problem – although governments are wary of tokens issued by private companies.
However, there are still clear problems for companies when it comes to the instant processing of transactions. Due to the way the banking system is set up, it can often take days for payments from merchant customers to actually process.
This is a problem that private companies and governments are trying to solve through new technologies, including blockchain and digital currencies.
https://www.cnbc.com/2023/05/16/samsung-explores-offline-cbdc-that-works-with-galaxy-phones.html Samsung is investigating offline CBDC that works with Galaxy phones